NEW YORK, Oct. 13, 2012 /PRNewswire/ --Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Patriot Coal Corporation ("Patriot Coal" or the "Company") (OTCQB: PCXCQ).
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) certain Patriot Coal officers had disclosed misguiding statements regarding the Company's business prospects; (2) as such, the Company had violated Generally Accepted Accounting Principles and U.S. Securities and Exchange Commission ("SEC") rules by failing to correctly account for costs associated with Court-ordered remediation obligations related to the Company's selenium water treatment requirements; (3) Patriot Coal officers had improperly capitalized these costs instead of recording them as expenses, thereby overstating the Company's financial results.
In response to comments received from the SEC regarding the Company's accounting for the Court-ordered remediation costs, defendants were forced to reveal that the Company's previously issued consolidated financial statements for the years ended December 31, 2011 and December 31, 2010 could no longer be depended upon. Moreover, Patriot Coal officers admitted that it was necessary to restate the Company's previously issued consolidated financial statements to accrue a liability and recognize a loss for the estimated costs of installing the Court-ordered water treatment facilities.
On July 9, 2012, Patriot Coal shocked the market when it announced that it and substantially all of its wholly owned subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. When the true state of the Company's business health became public, Patriot Coal's shares dropped 72%, from a closing pricing of $2.19 on July 6, 2012, to a closing price of $0.61 at the end of the day on July 9, 2012.
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Take Action
If you purchased Patriot Coal Corporation stock or options between October 21, 2010 and July 6, 2012 and would like to discuss your legal rights, visit www.faruqilaw.com/PCXCQ. You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to rgonnello@faruqilaw.com or fmcconville@faruqilaw.com. Faruqi & Faruqi, LLP also encourages anyone with information regarding Patriot Coal Corporation's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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FARUQI & FARUQI, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
rgonnello@faruqilaw.com
Francis McConville, Esq.
fmcconville@faruqilaw.com
Telephone: (877) 247-4292 or (212) 983-9330
SOURCE Faruqi & Faruqi, LLP
